Flickr user Marco Verch
With student loan debt soaring into the trillions, an unsolicited e-mail or phone call from a company claiming that they can help forgive and eliminate your student loan debt may seem like a dream come true. But beware—this dream is more likely to turn into a nightmare. Student loan scams are more rampant than you may imagine as many students find out the hard way every year.
As with everything else, knowledge is power when it comes to avoiding student loan scams. Knowing what to look for is the key to protecting yourself.
Wouldn’t It Be Easy To Spot Student Loan Scams?
Scammers are just out to make a fast buck with the least amount of work involved. While you think student loan scams would be easy to spot, the scammers who run them employ a subtle approach that takes advantage of a student’s youth and inexperience with money, making these scams really difficult to spot.
Watch for these 4 red flags so you don’t get burned by sneaky student loan scams.
Unsolicited E-mail, Telephone Call, or Social Marketing “Outreach”
Sometimes recent graduates may receive an unsolicited e-mail or telephone call offering help with their student loan debts, or they may have clicked a link through their Instagram or Facebook account. If a company contacts you out of the blue offering “help” with your student loans, then chances are good this is a scam. Don’t be fooled into thinking these companies are helpful or even legal. Make sure you do plenty of research on a company before engaging.
Asking You To Pay Up-Front Fees
Any company that wants you to pay massive fees before they even consider helping you is most likely a scam. This goes for high-pressure “sales” tactics as well. If you receive a completely unsolicited telephone call or e-mail regarding a fast repayment or complete cancellation or forgiveness of a student loan, hang up and definitely don’t answer that e-mail or click any links out of curiosity. The Department of Education does not consult with private lenders when they provide you your student loan, and any company claiming they are working on behalf of the Department of Education is running a scam.
Taking Control of Your Loan
No legitimate company will ever tell you that they must take over your loan payments. The US Department of Education will never offer to take over your loan payments. If you start to feel the pressure these types of “companies” put on young and unsuspecting new graduates, say “no.” Hang up the phone, disengage from that chat, or just ignore that e-mail. Any company that claims they must take over your loan on your behalf is a scam.
The Company Claims to Forgive All Your Student Debt
It’s extraordinarily hard (and rare) to have all of your student loan debt forgiven. Even federal loan forgiveness programs require you to meet certain basic criteria. Any company claiming that they can make all your student debt disappear as if by magic is running a scam. If it sounds too good to be true, it is.
Don’t fall victim to student loan scams. If you cannot meet your monthly payments on a federal student loan, call the US Department of Education, and be ready to explain your situation.
If you cannot meet your monthly payments on a private student loan, call your lender and explain your situation. The majority of lenders will work with you to resolve the situation.
